Long nerdy post: Amul is not actually a normal company and most people here don’t know how it works
Sorry in advance for a long nerdy post on a meme subreddit 😭
But after spending enough time here, I realised many people genuinely don’t know how Amul actually works structurally.
Background: I’m an IRMA alumnus. IRMA = Institute of Rural Management Anand. It was founded by Dr. Verghese Kurien (the Amul guy) to professionally train people for cooperatives and rural institutions.
Amul is NOT a normal company
Amul is not like Nestlé or Britannia where profits go to shareholders sitting somewhere.
Amul is part of the Anand Pattern cooperative structure, which was born in Anand, Gujarat after local farmers got exploited by private milk contractors in the 1940s.
Sardar Patel encouraged farmers to form their own cooperative. Tribhuvandas Patel organised it on ground level with local dairy farmers.
Then later Verghese Kurien industrialised and scaled it.
That model eventually became Operation Flood; one of the biggest dairy development programs in the world.
People think Amul is one single company controlling everything from top. It’s actually a federation structure.
Tier 1: Village Dairy Cooperative Society (VDCS)
At village level, farmers pour milk daily into their local cooperative society. These are actual farmer members. They are bot employees but the actual Owners of the organisation.
Tier 2: District Milk Union
Example:Kaira Union, Banas Dairy, Mehsana Dudhsagar Dairy, Sumul Dairy etc. These unions process milk, manufacture products, handle procurement etc.
Tier 3: GCMMF
This is the marketing federation.
GCMMF is Gujarat Cooperative Milk Marketing Federation. THIS is what people commonly call “Amul”. GCMMF mainly handles branding, marketing,
distribution, exports, sales network etc.
It does NOT “own” farmers like a corporate owns suppliers. Rather, the district unions themselves own the federation. That’s why technically Amul is a federation of cooperatives.
So Dairy Farmers own Village Level Dairy Cooperatives which own the District Dairy Unions which own the GCMMF which owns the Amul Brand.
But why is Amul selling ice cream, chocolates, protein products, pizzas etc? Because value addition in brand and revenue is higher farmer returns.
If Amul only sold liquid milk, farmer income would remain limited. Milk has thin margins and perishability issues.
Converting milk into cheese, butter, paneer, whey, ice cream, chocolates, protein products
creates better margins.
And unlike a normal FMCG company, those surpluses ultimately circle back to the cooperative ecosystem to the far flung dairy farmer of rural India.
People forget that when Amul earns more, it is not enriching corporate shareholders.
Even beyond the income of dairy farmers, the money also cycles back through milk procurement prices, infrastructure, chilling plants, veterinary services, cattle feed, artificial insemination, extension services. It takes a lot of resources to run this giant cooperative dairy ecosystem.
Why is Amul involved in cattle feed and fertilizers?
Because the cooperative model is farmer-centric, not just product-centric. This is another thing many urban consumers miss. The objective is not merely to “sell dairy products”; the larger objective is to increase rural producer prosperity.
A dairy farmer’s economics depends heavily on cattle nutrition, feed costs, animal health and overall productivity. So naturally, dairy cooperatives expanded into areas like cattle feed, mineral mixtures, veterinary support, animal breeding and fodder development. Similarly, fertilizer and other agri-inputs are connected to the same rural household economy. The logic is fairly simple: better farm economics leads to healthier cattle, healthier cattle lead to better milk productivity, and better productivity ultimately improves farmer income which is the basic mandate of the cooperative ecosystem.
With this, Amul has entered completely non-dairy categories like atta, edible oils, spices, frozen foods or other FMCG products. Once a nationwide distribution and retail network is built, cooperatives naturally try to leverage that scale beyond just milk products. Diversification also reduces dependence on volatile dairy margins alone such as variation in milk quantity in seasons and risks of animal disease outbreaks.
Anyway sorry again for the TED Talk on a meme subreddit 💀
Feel free to ask me anything related to this system. If you have read so far, three claps for you!